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Trade liberalization and inter-industry productivity spillovers: an analysis of the 1989-1998 Brazilian trade liberalization episode

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  • Paz, Lourenco

Abstract

The desire to increase manufacturing productivity has been a commonly cited goal of the trade liberalization episodes that have swept several developing countries since the 1980s. The literature has found evidence supporting such an increase in productivity. However, this paper finds that the methodology used in the literature ignores inter-industry productivity spillovers and suggests that this omission biases estimates of the impact of import tariff reduction on industry-level productivity. The findings from a case study of the Brazilian trade liberalization episode (1989-1998) indicate that the literature has overestimated the direct effect of trade liberalization by at least 25%, and that inter-industry productivity spillovers exist, are positive, and account for 70% of the increase in productivity that results from a reduction in import tariffs.

Suggested Citation

  • Paz, Lourenco, 2012. "Trade liberalization and inter-industry productivity spillovers: an analysis of the 1989-1998 Brazilian trade liberalization episode," MPRA Paper 38859, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:38859
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    References listed on IDEAS

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    Cited by:

    1. Bos, M.J.D. & Goderis, B.V.G. & Vannoorenberghe, G.C.L., 2014. "Inter-industry Total Factor Productivity Spillovers in India," Other publications TiSEM 4ce3fbe6-8aee-4255-af6a-e, Tilburg University, School of Economics and Management.
    2. Peng, Ling & Hong, Yongmiao, 2013. "Productivity spillovers among linked sectors," China Economic Review, Elsevier, vol. 25(C), pages 44-61.
    3. repec:wyi:journl:002193 is not listed on IDEAS

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    More about this item

    Keywords

    productivity; trade liberalization; Brazil; spillovers;
    All these keywords.

    JEL classification:

    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • F1 - International Economics - - Trade
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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